Real estate investment universe expands in 2020
Canada’s real estate investment universe climbed one notch in the global rankings in 2020 as MSCI pegged its holdings of professionally managed real estate for investment purposes to nearly $ 364 billion (CAD 546 billion), a value of $ 2.9 billion (3.6 billion gain in market size as of 2019. This makes the Canadian market the seventh largest of the 33 that the Global Property Index producer tracks for its annual report, which measures the size of the professionally managed global real estate investment market.
The Hong Kong market made way for Canada’s rise, slipping to eighth place after losing $ 22 billion in market size, reducing it to $ 356.3 billion. Along with Brazil and South Africa, it was one of only three markets on a decline.
Overall, MSCI estimates global market size by 9 percent to $ 10.5 trillion in 2020. That is an increase of $ 9.6 trillion in 2019. The United States was a major contributor to this record, which is an increase the market size increased by $ 232.5 billion year-over-year. Other strong performers are Germany, Sweden and Switzerland.
“The convincing expansion of the real estate market in the face of the COVID-19 pandemic seems to underscore the determined pursuit of investors for returns in all asset classes,” said René Veerman, MSCI Real Estate Director, in his foreword to the recently published report.
Although he attributes some of the gain in value to currency fluctuations, he notes the “subdued” transaction activity and asset growth in 2020 – and concludes that the growth in market size is due to new additional investments rather than the momentum of existing ones Stocks is attributable. In the world market, the asset decreased 1.3 percent compared to 2019, as opposed to a 2.9 percent increase in 2019 compared to 2018. Currency movements caused the market size to increase 3.9 percent in 2020, down from just 0. 1 percent in 2019.
These effects were not felt equally in the 33 markets examined. Canada posted one of the largest declines in capital growth of any nation, minus 7.8 percent, but still posted asset growth of 1.1 percent. Ten markets saw positive capital growth, led by Norway with an increase of 5.2 percent. The US saw negative capital growth of 2.8 percent and asset growth of 1.2 percent, while the UK saw more severe losses with capital growth of minus 6.5 percent and more moderate asset growth of 0.5 percent.
After the USA, which alone accounts for almost 35 percent of the global real estate investment universe, Japan, Great Britain, Germany, China and France are the next largest markets. The United States, Canada and Brazil, collectively defined as “America”, accounted for almost 39 percent of the market size in 2020, compared with around 35 percent in EMEA (Europe, Middle East and Africa) and 26.5 percent for Asia – Pacific States.